J.C. Penney CEO: We're Cutting 900 Jobs To Be More Like A Start-Up

Shoppers arrive at a J.C. Penney store at the Ford City Mall on January 26, 2012 in Chicago, Illinois. (Image credit: Getty Images via @daylife)

J.C. Penney will lay off 900 workers, as new CEO Ron Johnson tries to steer the retailer in a new direction. Cutting the corporate structure is an important step toward becoming a more nimble business, Johnson said.

"We are going to operate like a start-up," he said in a statement this afternoon. "In our case, this has involved some very difficult decisions that have had an impact on many of our associates, but these changes are essential to help us achieve our long-term goals and, ultimately, grow our associate base as we grow our business."

The 110-year-old business will reduce its headquarters staff by 600 and shutter a Pittsburgh call center in July, trimming another 300 jobs. The call center experienced a 30% fall in volume complaints in past months, thanks to the retailer's simplified price structure, J.C. Penney spokeswoman Rebecca Winter said in an email to FORBES.

As part of the makeover, J.C. Penney switched to a three-tier price scheme on Feb. 1, and said it would redesign its locations into small departments clustered around a central location called The Store.

J.C. Penney shares were down 1.5% shortly before the closing bell, at $34.96. When Johnson announced his plans, the stock soared as high as 25%. It has since fallen, and is now down 0.5% for the year.

J.C. Penney is aiming to cut $900 million from annual expenses by 2013. The retailer has seen its sales slip from $19.8 billion in 2008 to $17.2 billion last year, while needing to compete with rivals like Macy's, Nordstrom, Gap and Target.